Section 145

Method of accounting.

145. (1) Income chargeable under the head "Profits and gains of business or profession" or "Income from other sources" shall be computed in accordance with the method of accounting regularly employed by the assessee:

Provided that in any case where the accounts are correct and complete to the satisfaction of the ^91a[Assessing] Officer but the method employed is such that, in the opinion of the ^91a[Assessing] Officer, the income cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the ^91a[Assessing] Officer may determine.

The following second proviso shall be inserted by the Direct Tax Laws (Amendment) Act 1987, w.e.f. 1-4-1989:

Provided further that where no method of accounting is regularly employed by the assessee, any income by way of interest on securities shall be chargeable to tax as the income of the previous year in which such interest is due to the assessee.

(2) Where the ^92a[Assessing] Officer is not satisfied about the correctness or the completeness of the accounts of the assessee, or where no method of accounting has been regularly employed by the assessee, the ^92a[Assessing] Officer may make an assessment in the manner provided in section 144.

[AS AMENDED BY THE FINANCE ACT, 1988]